Expats looking to obtain a US mortgage loan Archives

As many of you know, America Mortgages offers two main ways to qualify to purchase or refinance investment real estate in the U.S. – either using personal income or using only the properties’ projected or actual rental income. For two main reasons, most of our clients use the latter. One, their income may be extremely complex or documented insufficiently, or two, they plan to move quickly with a streamlined, minimal documentation approach.

Difficult times call for creativity and common sense.

At the beginning of the year, qualifying based on rental income, otherwise known as DSCR was easy. Rates were low, rental yields were stable, and properties cash flowed on paper very easily. Since the beginning of the year, rates have continued to increase. Overall, rates remain historically low when you look at the U.S. mortgage market over the last 20 years. Rental yields have continued to climb to record levels, however, documenting these rental yields through an appraisal, which is how we underwrite these loans, has become increasingly challenging as there is typically a lag in rental comps to support the higher rents.

This presented our team with a problem; In the current environment, in order to qualify for a “standard” DSCR loan, clients were required to put more money down to keep the underwriting numbers in line. In general a DSCR loan requires the rental income listed in the appraisal to be greater than or equal to the mortgage payment. Unfortunately, it’s going to take time for rental appraisals to correlate with the higher rental yields, to where DSCR will be a viable option again. However, we have a solution…

Rejoice Global Investors…Introducing America Mortgages’ No-Ratio Mortgage Loans!

“No-Ratio loans,” have recently been introduced as options to help clients with minimal down payments to leverage a higher LTV without the constraints of waiting for rental yield to catch up. You might ask yourself – why would someone want to go into a loan knowing the property cash flow doesn’t cover the mortgage payment?

It’s a good question! This is common sense underwriting and as mentioned previously, the rental comps mentioned in the home’s appraisal sets the cash flow target. Rental comps are hard to measure; they are dependent on when tenants in your area have renewed their leases, are the renewed leases at market rent, etc. This measurement is often not the rental amount the client is buying the property for. It is very common to review an appraisal and see rental comps being used where rents haven’t been raised in years; this is likely because it’s a stable tenant, the landlord isn’t in need of maximizing the yield and prefers to keep a stable tenant – a problem when trying to get the maximum rental amount on an appraisal and a cash flow loan to work.

Here at America Mortgages, we put a lot of emphasis on figuring out the client’s plan for the property. How do the rental comps in the area look versus what their realtor believes they can rent it for? Are they buying for long-term rentals or short-term rentals? All of these questions plan into the type of mortgage program they will utilize – and now more than ever, it’s the no–ratio loan that allows them to avoid the hassle of counting on rental comps in appraisals and still put minimal down into the mortgage as possible – they also understand the ability to refinance the loan when rates improve in the future – which they will.

Bottom line, America Mortgages’ clients are sophisticated and seasoned U.S. real estate investor. Our U.S. loan officer based in 12 different countries know and understand the market. Better than anyone else. We listen to all our clients requests, and if possible we find a solution which fits the market and “makes sense”. No Ratio Mortgage Loans is such a solution!

For more information, please Join us for an exclusive Asia-wide, one day only, in-person U.S. real estate seminar to showcase a brand new, affordable single-family neighborhood development in a prime area of Dallas, Texas, perfect for an investment opportunity. Register here!

Alternatively, contact us today at [email protected] to speak to our team of U.S. mortgage specialists today!

www.americamortgages.com

One of the most unique and inexplicably happy events of life is having a baby. This little bundle of joy keeps everyone on their toes, creating madness around the house and your lives, but somehow, it all seems worth it.

As a parent, you likely already have a retirement fund under your belt, but have you considered alternative and traditional ways you can invest your extra cash in protecting your children’s future? In fact, it’s easier than ever to invest in Real Estate with technology and options for obtaining mortgage loans even if you’re not a citizen of that country.

Investing in property is largely seen as a safe way to build wealth, but it is a long term strategy. The younger you start, the more effective it is, thanks to leverage (borrowing from a bank) and the power of compounding (time). For example, if you acquire a property for $500K at age 20 and it grows by a conservative 5% per annum, it will pretty much double by the time you are 35 to $1 million. How many people have $500K of equity at this young age? And by age 50, it will be worth 4 times what you paid for it, at $2 million. If capital growth is 7%, then the property will double in value every 10 years, thus dramatically accelerating your portfolio.

Should I invest in my own home country, the United States, or emerging markets?

All the investment opportunities available can be overwhelming. We understand. So, to help you filter out the noise and make informed decisions, America Mortgages has mortgage options parents should consider as great places to invest in Real Estate for your and your children’s future:

Commercial real estate

We often think of real estate investing in homeownership or maybe “house flipping.” Still, there are lucrative opportunities in the commercial side of the industry that are no longer exclusive to ultra-wealthy investors. Online real estate platforms make it possible to invest in commercial real estate without ever stepping foot inside a property or country it is being sold in. Of course, there needs to be a “trust” issue with investing in an asset. However, through online reviews, personal recommendations, and proper research, these risks can be mitigated.

A recent survey asked global participants to choose how they would invest $10,000, and real estate was the second most popular choice among millennials, Generation X, and baby boomers. Nearly 23 percent of those surveyed said they would pool their $10,000 with money from other investors to purchase Real Estate.

When you’re first starting out, a smart strategy focuses on one type of investment, whether it be apartments, offices, retail, land, etc. A popular type of commercial real estate is student housing units — the very places you might be paying rent to when you send your kids off to college. Student housing in many University locations throughout the U.S. can be extremely lucrative investments.

Residential real estate

As a global citizen, if I wanted to invest in Singapore, Hong Kong, Seoul, Bangkok, Shanghai, or any of the major global cities such as New York, San Francisco, London, or Sydney, the barrier to entry would be my purchasing power and the ability or inability to obtain leverage from a bank or private lender. However, as an example, in smaller cities around the United States, there are millions of Real Estate options for investors that never imagined they could own Real Estate, let alone be a Global Real Estate Investor.

America Mortgage’s only focus is on sourcing the best options for non-citizens or Expats looking to obtain a mortgage loan to purchase or refinance Real Estate on a global scale. As many of your children may attend school in the U.S., obtaining a mortgage loan to purchase residential (or refinance) property in the U.S. just became that much easier. Our partnership with institutions and private lending partners has made us the premier “go-to” source for real estate investors. Residential homes are the easiest to qualify for and a great way to build your portfolio.

The difficulty is the starting point, as young people rarely have enough for a large down payment for a first property. The good news is, most of our U.S. and Australian mortgage loans only require a minimum down payment of 30%. Note, that is 30% of a property with a purchase price far less than you could buy in Hong Kong as an example. The opportunity is amazing to build and grow a viable Real Estate portfolio without a huge capital expense. If well researched and with the right advice, a property can be cash-flow neutral or positive in the current market. If held over time and as rates will likely increase globally, changing the current economic model from buyers to a renters market should remain quite manageable.

If you acquire several properties over time, manage properly and leverage smartly, imagine the amount of equity you can build up by the time your children are an adult or when you’re ready to retire!

For more information on mortgage loans in the U.S., please email America Mortgage’s – [email protected].